Polarization and Policy: The Politics of Public Sector Pensions

Abstract

For decades, America’s state and local governments have promised their workers increasingly generous pensions but failed to fully fund them, producing a fiscal problem of staggering proportions. In this paper, we examine the politics of public pensions. While mainstream theoretical ideas in the American politics literature would suggest the pension issue should be polarized, with Democrats pushing for generous pensions over Republican resistance, we develop an argument—rooted in more traditional theoretical work by Schattschneider, Lowi, Wilson, and others—implying that both parties should be expected to support generous pensions during normal times, and that only after the onset of the Great Recession, which expanded the scope of conflict, should the parties begin to diverge. Using a new dataset of state legislators’ votes on hundreds of pension bills passed between 1999 and 2011, we carry out an empirical analysis that supports these expectations.